#6940 - Property B Summary Equitable Interests - Property Law

Topic 1 : Equitable Interests

1. Trusts:

   1. Express Trusts

      1. Must be evidence in writing 53(1)(b) PLA

      2. Can be created:

         1. Intervivos

         2. Via a will

      3. Created when:

         1. Actual transfer to transferee

         2. Declare yourself to be a trustee

   2. Resulting Trusts (RT)

      1. Definition: circumstances such that equity presumes, despite transfer of legal title to one person, that the transferor’s intention was for some/all of the equitable title to be retained by the transferor. Disregard paperwork, look at the contributions of those involved

         1. If a court finds that a RT exists, X will hold beneficial interest in the property on trust for Y

         2. BUT for a purchase price resulting trust, where two people have contributed to the purchase money in unequal shares, and the property is purchased in their joint names, in the absence of the presumption of advancement, there is a presumption that the property is held by the purchaser on trust for themselves as tenants in common in the proportions in which they contributed to the purchase price Calverley

            1. Purchase price: what is considered to be a contribution to the purchase price?

               1. Liability under a mortgage is part of the purchase price Calvery however subsequent contributions to mortgage payments by a person who is not a joint mortgagor do not give rise to the presumption Baumgartner v Baumgartner

               2. Includes the home built shortly after buying the vacant lot Cummins

      2. Presumption of RT:

         1. Arises where a person purchases property and arranged for title to be transferred to another person, who provides no consideration Little v Little

            1. Under this trust, it is presumed that the transferee holds the property on trust for the person providing the purchase money

         2. When does it arise: when property is transferred to a volunteer or when property is purchased in the name of another

      3. Rebutting the presumption

         1. Intention to the contrary

            1. Evidence of an actual intention (implied through words or conduct – not imputed through a reasonable person) to pass a beneficial interest at the time of the transfer or purchase Calverley

               1. Can look at subsequent conduct after the transfer to determine original intent Cummins

            2. Onus is on the person seeking to rebut the presumption

            3. Where a husband and wife purchase a matrimonial home, each contributing to the purchase price and title is taken in the name of one of them, can be inferred that it was intended they both half one-half interest Cummins

               1. The court is unlikely to find a PPRT in a matrimonial situation.

            4. Irrelevant factors: Calverly:

               1. Mortgage repayments

               2. Non-financial contributions

         2. Presumption of advancement

            1. The transferee is presumed to take beneficial title when the transfer is from:

               1. Husband to wife (or male fiancé to female fiancée)

               2. Parent to child

            2. Can be rebutted by a contrary intention:

               1. i.e. that the provider of the purchase money intended to retain beneficial title

               2. Evidence may include:

                  1. Husband’s purchase was made using damages he received after workplace accident and was for his own benefit for his own super fund Buffrey v Buffrey

               3. Doesn’t matter if rebuttal was for an illegal purpose, can still be used Boumelhelm

      4. Timing

         1. Confined to actions at time of acquisition

   3. Constructive Trusts (CT)

      1. Common intention constructive trust (CICT)

         1. Definition: equity will hold that a person has acquired an interest in property so as to prevent the holder of the legal interest in that property from behaving unconscionably, where the party has acted to their detriment Muschinski

            1. CICT can help to save a party where there is a resulting trust Muschinski

         2. The following three elements must be proven: Ogilvie v Ryan

            1. Actual common intention

               1. Can be inferred from words or conduct (but not imputed) Allen v Snyder

            2. Detrimental Reliance

               1. was one party induced to alter their position Ogilvie v Ryan

               2. Even if there is no financial loss, the mere loss of bargain is enough Ogilvie

               3. Examples:

                  1. Father paid for extension on condition he would live there Morris v Morris

            3. Unconscionability

               1. Would it be fraud on the defendant for the deceased or executor to assert his legal title to the property? Ogilvie v Ryan

         3. Timing:

            1. The CICT is made out when all elements are satisfied. Can occur before or after the property is acquired. Parsons

      2. Joint Venture constructive trust (JVCT)

         1. Definition: A JVCT arises where a JV, for which both parties pooled their resources, breaks down, without attributable blame Muschinski. Equity will intervene to prevent one party unconscionably retaining a benefit

         2. The following elements must be satisfied:

            1. Joint Venture:

               1. The parties must be participating in a JV, that being a business or a relationship/family Baumgartner

               2. This does not include simply lending money to another to realise their own endeavour

               3. Living together is not enough to constitute a JV Willis v WA

            2. Pooling of resources:

               1. The P will need to show that the parties pooled their earning and efforts for the mutual security and benefit of the JC

               2. Examples:

                  1. Direct financial contributions Baumgartner

                  2. Indirect financial contributions e.g. sacrifice earnings Baumgartner and potentially domestic contributions Peridge

                  3. Long stable family relationship in which marriage was under continuous contemplation

                  4. Look at reasons why they bought the house: Baumgartner

                     1. To secure accommodation for their child

                     2. Mutual security and benefit

                     3. To raise a family

               3. Unlike Cummins, court has separated the additional money spend on duplexes from the purchase price. Baumgartner

            3. JV breaks down without attributable blame

               1. Courts are not concerned with blame Boumelhelm

            4. Unconscionable

               1. Examples:

                  1. Unconscionable to deny parents interest in property Boumelhelm

                  2. Unconscionable for man to walk away with woman’s contribution Baumgartner

                  3. Unconscionable for Mr D to seek a full half interest without making an allowance for the fact wife had contributed 10/11 of purchase price Muschinsky

               2. Court held in Bryson v Bryant that it was not unconscionable for the man to retain the benefit of his wife’s non-financial contributions

                  1. However, in Miller v Sutherland, contributions of labour made by woman in extensively renovating house were recognised

         3. Timing

            1. Arises either:

               1. when element are made out, (one approach) or;

               2. only after a declaration by a court Bounelhelm

                  1. Can be backdated where appropriate Muschinski to avoid a third party being adversely affected.

                  2. This is the cases even if the four elements are proved earlier

                  3. However this approach was rejected in Parsons

         4. Remedies:

            1. Start with the presumption that the share is equal subject to adjustment to account for different contributions. Baumgartner

               1. Contributions:

                  1. Domestic contributions may not count Baumgartner but according to Peridge they might

                  2. Includes opportunity costs Baumgartner

               2. If TP rights supressed then may not impose CT Boulmelhelm

               3. Before a CT is awarded, the court must decide if there is an equitable remedy that falls short of a trust that might avoid someone getting an unfair proprietary interest Boumelhelm

               4. NB: equity is discretionary

            2. Parties may hold legal interest on trust to repay each other their respective contributions Muschinski

2. Estoppel

   1. A proprietary estoppel will arise when a registered proprietor unconscionably seeks to rely on that title to defeat an expectation they created in another person by a representation and which that other person has relied on to their detriment Waltons

   2. Four elements to prove:

      1. Assumption/expectation that there will be an interest in land

         1. The P must prove that the D made a representation under which he encouraged the P’s expectation that he would receive a property right

         2. Any purchaser who took with notice is bound by equity Inwards

         3. Examples:

            1. Dad tells son he can build a house on land and live there forever Inwards v Baker

            2. Assumption that son would be given property and orchard Guimelli

            3. Received a half interest in property by staying there Donis

      2. Reasonable Reliance that leads to detriment

         1. Reliance

            1. P will argue they were induced to rely on the representation and acted in reliance upon it by:

               1. Altering his/her position;

               2. Remaining on property;

               3. Declining to pursue other opportunities; or

               4. Expending money to improve property

         2. Detriment:

            1. Need not be monetary in nature Donis

            2. Examples:

               1. Son would lose his home Inwards

               2. Wife gave up teaching, had a child and renovated home Donis

         3. Two views on what the detriment is:

            1. Narrow: reliance loss – what was the loss that flowed from reliance on the correctness of that assumption (money to build house)

            2. Broad: expectation loss – loss suffered by expectation not being fulfilled (the actual loss of the property)

      3. Unconscionable:

         1. It must be unconscionable that the person resile from the position

         2. Examples:

            1. Son stayed on land and refused job offers Guimelli

            2. Not unconscionable had there been an intention to enter the marriage knowing that it would not last Donis

      4. Remedy:

         1. Expectation relief (favoured by courts – satisfies the broad detriment) Donis

            1. Post Giumelli, courts start with prima facie fulfilment of the promise, subject to:

               1. You should prima facie get land, but that should be qualified to not show injustice to third parties (would it kick someone out of the land) Instead you might get damages equivalent to the land. Courts must be flexible and look at the circumstances of each...